Coca-Cola Amatil (ASX:CCL) talks FY16 results and strategy


by David Chau

Coca-Cola Amatil (ASX:CCL) Managing Director, Alison Watkins discusses FY16 results and the company’s strategy in 2017.

At Coca-Cola Amatil (ASX:CCL) we’d describe ourselves as the power behind the region’s favourite brands. We operate across five main businesses and six main geographies. Our strengths are our sales and manufacturing capability. And we’re mostly about non-alcoholic ready-to-drink, but we also have important businesses in alcohol and coffee. And also fruit processing with our business SPC Ardmona, which is based in Shepparton, Victoria.

We’re very pleased with our 2016 result; we delivered on our promise to our shareholders. In underlying terms, our EBIT was up to $683 million and our (underlying) NPAT was up to $418 million. We did have an impairment charge relating to our SPC business (which was an after tax, around $172 million) and our statutory profit was $257 million, after tax. We’re very pleased with our cash flow. Cash realisation was over 110 per cent and our gearing reduced by around $153 million during the year.

As a result, we were able to announce a $350 million buyback, which will complete over a 12-month period. Also, we declared a final dividend of 25 cents, which was 46 cents for the year – delivering on our payout ratio of in excess of 80 per cent for shareholders.

We were delighted with the progress from our growth businesses. Indonesia, PNG, New Zealand, Fiji and alcohol and coffee, all delivered really good strong growth for us. And our core Australian beverages business, while profit declined slightly by 1.8 per cent, they made great progress on their restructuring agenda – which is all about rebalancing their portfolio, reducing our cost structure and developing new capabilities.

At Amatil, our strategy is very clear. We want to lead, execute and partner. These are the three things that drive our strategy as a group and across each of our businesses. So leadership is all about innovation, investing in our brands and continuing to develop new products – and taking leadership roles in the categories that we compete in. Execution is all about our great sales force execution and great relationships with our customers, and productivity. And partnering is the core of who we are at Amatil, working really well with our brand partners.

We’re confident that we will deliver against our shareholder proposition, which is that we’re targeting mid single digit EPS growth. It always will depend, of course, on the success of our revenue initiatives in Australia, the Indonesian economic factors and also regulatory conditions in each of our markets.


David Chau

Finance News Network
David joined FNN in April 2016. In addition to presenting the Market Outlook and latest business news stories, David interviews senior economists and CEOs of ASX-listed companies. Prior to working for FNN, David was a litigation lawyer.